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Why Did Nortel Fail? [View article]
Each of the baby Bells used the DMS-100 as central office switches, and the Meridian 1 and the CS-1000 are bulletproof.
In what way was the Nortel product inferior?
Product quality is not an issue in the PBX market. Abundance is the problem; there are too many fine products for the market to support, just as there are too many car makers.
Fujitsu simply walked away from the business about 9 years ago. Siemens would like to do the same thing. The competition in that business is ferocious.
On Jan 15 10:45 AM Roger Hornsby wrote:
> You should ask their customers. They always know. Their telecom
> products have always been self serving and inferior to their competitors.
> In a boom market like we have had in the past, you can survive or
> even prosper without doing a great job. But when the environment
> gets difficult....
Why Did Nortel Fail? [View article]
After the reverse splits are taken into account, Nortel is worth less than 1/1000 of its market cap in 1999. Around that time, IP-based telephone systems began to emerge. IP-telephony spelled the end of legacy TDM PBX types.
Now, legacy PBXs can last a long time. Many companies have gone through Windows 98, Windows 2000, WinXP and now have Vista, replacing desktops and servers regularly, and all during that time they haven't replaced their PBX, and may not have even maintained software upgrades.
During that time period, IP-telephony grew.
Open-source IP telephony, specifically the Asterisk-based telephone systems, heighten the problem for all providers of telephone equipment. Now that it has achieved the required QoS, reliability and scalability, and due to the current re-examination of IT budgets, Asterisk-based telephony will also overtake the IP-PBX offerings that are still using the legacy-TDM licensing model (think overpriced Cisco and Avaya).